Purchasing New Car

[brett]

Given the choice of taking free money or leaving it on the table I would always go with the former rather than the latter.

[Idnar7]

Thank you all for the most helpful feedback.

[lauradrops]

We had negotiated a price over the phone for a car purchase and trade in and went in to the dealership to sign all the paperwork. They had never asked how we would be paying for it. When they found out it would be a cash purchase, they said there would be a $2000 fee added for a cash purchase. We walked out and bought elsewhere.

[Koolau]

Quote:

Originally Posted by lauradrops We had negotiated a price over the phone for a car purchase and trade in and went in to the dealership to sign all the paperwork. They had never asked how we would be paying for it. When they found out it would be a cash purchase, they said there would be a $2000 fee added for a cash purchase. We walked out and bought elsewhere.

I love it. Some sales guy had been licking his chops and when he heard "cash" I'm sure his heart sunk, 'cause his commission was contingent on getting you to finance the deal.

We did a cash deal years ago and they sat us down in a room and tried to show how we'd be better off financing at 9%. I had to restrain myself from laughing.

[Badger]

Quote:

Originally Posted by Walt34 Generally the dealers don't want your dirty ol' cash or check. They want you to finance it so if you're going to pay cash don't let them know until the end. As others said get the out the door price first, then discuss financing (if any) and trade-in (if any). Those are three separate transactions and should be treated as such. Our last car we intended to pay cash but the dealer wouldn't do the deal if we didn't finance, then his next sentence was "There's no penalty for prepayment" so that's what we did. I suspect he had some contract with Honda Finance that required it, so okay, we still saved several grand (this was well pre-covid) after paying the $40 or so for one month's interest on it.

+1
We did the same thing for our Hyundai Santa Fe a few years ago. We also made a down payment for a few thousand on a CC for a bit of rebate on the card. This is the only time I have linked my payment to a debit.
I really dislike making monthly loan payments for anything yet don't like linking our bank account to a debit. We only make a few payments like electricity, water, and CC payoff that we control through our CU.

Cheers!

[pjigar]

It depends. Ask dealer what's the all cash price vs best financed "price" (not the payment). Apparently some dealers have hard time talking price and are trained hard to talk payment.

The last new car we bought 10 years ago: I had cash for the car but apparently dealer had better incentives if I financed so we financed. Be sure to read fine print on pre-payment. Dealer incentives were dependent on a term that I keep the loan for at least 3 months so I gave a gentleman promise to dealer to not pay off before 3-months. We paid off loan on 4th month. Everyone was happy.

PS: I just read post#16 which is inline with my experience. I like to be candid and firm when I deal with dealers (keeps my dance time on a lower end). I lead with all the cards on table and I generally get best deal (but do your math and research about invoice price, dealer incentives, etc. before you talk). If I don't get a deal, then I walk. There are several dealers around our metroplex. But if you don't have many dealers then negotiate without talking about cash payment and reveal cash option last minute!

[aja8888]

Quote:

Originally Posted by Koolau I love it. Some sales guy had been licking his chops and when he heard "cash" I'm sure his heart sunk, 'cause his commission was contingent on getting you to finance the deal. We did a cash deal years ago and they sat us down in a room and tried to show how we'd be better off financing at 9%. I had to restrain myself from laughing.

9% financing? When did you buy your last new car....in the 90's . Today's deals are not even close to being the same as back then. (and there are no "deals" it seems anymore.

[Koolau]

Quote:

Originally Posted by aja8888 9% financing? When did you buy your last new car....in the 90's . Today's deals are not even close to being the same as back then. (and there are no "deals" it seems anymore.

Yes. Last new car was a '91. I don't actually recall the offered % financing. I was just thinking it was about 9%.

[aaronc879]

Quote:

Originally Posted by Dash man Typically you can negotiate a lower price by financing a portion, then pay it off when the first payment is due. If you choose to pay cash, don’t tell them. Work to negotiate an out the door price. Ignore the fees they try to push on you. If it’s taxable it’s negotiable.

Are dealers back to negotiating? When I bought my new car early last year every dealer was asking MSRP, nothing higher or lower, no negotiating. At least they weren't asking above MSRP like in a lot of places around the country.

[TrvlBug]

We purchased DH's 2017 car in late 2017 and received a $750 incentive for financing. We only had to wait until it hit the system before we could pay it off. Both dealer and we were happy .

My car, a 2023 EV purchased in fall of 2022 offered no incentives so we paid cash. At least we didn't have to pay over MSRP (we would have walked and waited until pricing came back down to earth). The car did not qualify for the $7,500 tax credit under the new rules. A few months later, the mfg/dealer offered the $7,500 credit if one leased. Quite annoyed that we just missed this opportunity .

DH's car is going in next week for yearly service and we'll be looking at their 'offerings' for a new one! They wanted a $15,000 markup on the EV we were also considering. We walked.

[JoeWras]

Quote:

Originally Posted by aaronc879 Are dealers back to negotiating? When I bought my new car early last year every dealer was asking MSRP, nothing higher or lower, no negotiating. At least they weren't asking above MSRP like in a lot of places around the country.

Depends on the brand.

[Koolau]

Quote:

Originally Posted by JoeWras Depends on the brand.

And model!

[Kings over Queens]

Quote:

Originally Posted by aaronc879 Are dealers back to negotiating? When I bought my new car early last year every dealer was asking MSRP, nothing higher or lower, no negotiating. At least they weren't asking above MSRP like in a lot of places around the country.

My recent experience with Hyundai dealers in the Denver area tells me "sort of." One dealer offered a discount off MSRP and when I countered he politely told me to pound sand. Their policy is no negotiation. Price is what they say, but they don't tack on charges for other silly services . Another dealer offered what appeared to be a deep discount that was then clawed back with "dealer adjustment charge" to the point it was almost the same price as the first dealer.

I went with the first guy based on his transparency.

[Gotadimple]

If inventory is still low, you probably won't find any room to negotiate. If you have to have a new car, time your buy to right before the new models start arriving.

Offer to buy last year's model (inventory will be very low - but it's a new car), and if there are several of the same model in your local area, put dealers in competition for the best price.

Even better if the dealership is owned by a company with a few dealers of the same brand in the local area - put those dealers in competition for the best price.

And do it all on the internet (except for the test drive). That means NO negotiation at the dealer, just a test drive. Your offer is handled via email. And if you can swing it, make it an all cash deal.

1. Dealers need to make room for the new models.
2. Dealers need to move cars that they have been financing off the lot.

[75Norton]

We just bought a new Honda Pilot and took advantage of the 3.9% loan offer rather than take money out of investments. We also drove the Telluride but my wife preferred the Pilot although the Telluride is usually rated higher in road tests. We bought the Pilot at MSRP after some effort and I think we could have bought the Telluride at MSRP although the dealers don't want to admit it.

[Koolau]

Quote:

Originally Posted by 75Norton We just bought a new Honda Pilot and took advantage of the 3.9% loan offer rather than take money out of investments. We also drove the Telluride but my wife preferred the Pilot although the Telluride is usually rated higher in road tests. We bought the Pilot at MSRP after some effort and I think we could have bought the Telluride at MSRP although the dealers don't want to admit it.

Heh, heh, when you walk out and they try to beat you to the door, you know there's more discount to be had.

[a60dan]

For once, we lucked out in this area.

Needed a tow vehicle and bought a 2021 Ford F150 that we got months later in 2022.

By giving up one $1000 rebate, we got 0% financing which came out to ~0.25% over 4 years.

I’d set aside cash in tIRA in late 2021 anticipating the bubble would pop soon.

Now the cash is earning almost 5% in money market account, and we can keep our income down the 4 years we need to. Saved way more than $1000 in income taxes here in NY.

I only buy new when it makes financial sense, and used was way too high at the time. We actually paid “invoice” price too, when I expected to pay MSRP.

Never let the dealer interleave the financing with the cash price.

They need to know they’ve got one chance to give their best price, and then talk cash vs financing.

Ford has given rebates if you finance too. Depending on the rate, we have paid off first month when it made sense. Not in 2022 😀

[arch57]

Quote:

Originally Posted by Steeler75 Can’t over emphasize to negotiate an OTD price first. If they want to offer an additional discount for financing it should be off the negotiated price. Secondly, the Telluride is in high demand and it took me a couple months to find one without all the dealer add ons and markups. Bay Area dealers in California all want $5-$10k above MSRP, with no interest in negotiating it down. Ended up finding one in Irvine at $3.5k under MSRP. They tried some of the add ons but I held firm and got the car at my price before flying down to get it. Love the car so far. I usually buy used but the prices for used Tellurides were very strong, not losing much off the price of new. Good luck.

Also consider the Hyundai Palisade as Hyundai owns Kia and the 2 SUV’s are twins, they share the same engine and drive trains. Interior and exteriors are different. For some reason the automotive press raves about the Kia and that drives up the price. I test drove both and couldn’t tell any difference but went with a 2022 Palisade at MSRP. Eighteen months and 30,000 miles later BEST vehicle I ever owned. My daughter had a $90k BMW X7 that I often drive with our small grandkids and I much prefer the Hyundai. More room, easier 3rd row access, more intuitive controls and touch screen.

[67walkon]

We bought a Hyundai 5 years ago. I negotiated a price first and then told them I would pay cash. The sales guy said he had to let the finance guy talk to us. I blew him off but then he said Hyundai would give me a $6,000 incentive to lease. I asked to see the lease and it had no prepayment penalty. The negotiated price was around $34,000. The amount financed by the lease was around $29,000 because there were some fees. Paid it off after a couple of months and saved around $5,000 over a cash purchase. The only issue was fighting with them over an additional fee they wanted to charge but the eventually gave up.

If the manufacturer has a lease incentive and hasn’t closed this loophole, it’s worth looking at.

[sroby2020]

We made our most recent auto purchase last December. We intended to pay cash, but got a $500 price reduction for financing (decent interest rate, too). No extra fees on the loan (which was strange to me, because that's how the dealers make more money).
The dealers around here no longer discount cash purchases, and we're lucky the we didn't have to pay over MSRP. We paid off the loan on the first payment, and the title came in with the lien already released.